Equal Pay Day was on March 20th – Some recent attempts to close the Gender Gap

by Anne-Sophie Rebner on March 21, 2015 - 12:43pm

Yesterday was “Equal Pay Day” in Germany and in some other countries with a comparable gender wage gap. It states the day in a year until which women have to work until they have statistically earned the same as men in the previous year. [1] The gender pay gap is still one of the most common and effective ways to measure the discrimination of women in the work place on a macro level. The Global Gender Gap Report is published once a year by the World Economic Forum to compare the gender gap of 142 countries. It takes into account the economic participation, the educational attainment, health and survival and political empowerment. In 2014, Germany was ranked 12th place. [2] In the report of the Germany’s official office for statistics, I found a 22 per cent wage gap for Germany.

The “unadjusted” gender gap that is most often used is calculated by comparing the average hourly wage of all employed. Beside this, there is also the “statistically adjusted” pay gap which considers the choice of employment, children related leave from work and part time work as well as questions of position and qualification. This figure was at about seven per cent in 2010 in Germany which leaves the question of the reason for this still recognizable disparity. [4] The other question is how to close this gap.

The federal minister of Germany, Manuela Schwesig, recently introduced a new concept for a law to close the gender gap which I will discuss in the following article next to some other attempts of closing the gap. [5] 

What Schwesig proposes is a concept of transparent pay for big companies. It addresses the fact that it is harder for people, in this case women, to compare the wages of co-workers and to identify discriminatory differences in pay if there is no chance to see the wage of another person in a similar position. The law does not want to give information about individual people openly but to lay open the wage for a particular position, taking into account qualification and the time working in the company. Also, only income brackets will be disclosed. [ibid] At the moment there is no information about concrete companies available to workers, only vague data for the different industries and sectors. The works committees also cannot make this information public.

The plans came up against some criticism in Germany. Opponents mainly talk about the protection of data privacy and the possible atmosphere of distrust that could develop in the companies because people can compare their wages. There is also the fear of too much bureaucracy because of obligatory wage reports. [6] However, these effects will be diminished by the fact that the law will only apply to companies with more than 500 employees. 

Critics also bring forward another argument. The say, the law will not touch the actual reason for income inequality. [7]

There are in fact other causes for the missing parity in the wages. Many of them are well known. Women still take time off work for children much more often then men and they increasingly work part-time as well as in low paid jobs.

The evaluation of a fair income is partly based on old principles in Germany. There is a bonus system for physically hard work but it does not apply to caring work, for example, that is often done by women and physically just as hard as many other jobs. 

In “Süddeutsche Zeitung”, the author of a commentary about the planned law says, the equality would only be made possible with personal encouragement, education and role models. [8] Although this statement has a true core, it is still fairly vague. But there are, just as there are many reasons for the pay gap, many initiatives to reduce it. I cannot go into detail about all of the here but to get a broader look on the problem, I do want to mention some categories in which regulatory laws and initiatives appear.

The first one stems from the disproportion of high and low paid jobs related to gender. The quota  which was passed this year in Germany and the minimum wage thus indirectly influence the wage gap in promoting women in well-paid leadership positions and fair pay for low-paid jobs.

Secondly, institutions for childcare are very important. According to a study published by the PEW Research Center in 2013, a longer paid parental leave in a country is linked to a wider gender wage gap. Although this is not the first conclusion that comes to mind when you think about parental leave, the reasons for this are obvious. More women than men make use of this opportunity which means more often they interrupt their career. [9]

There are some countries that have taken measures to change from “maternal leave” to “paternal leave” to work against this process. In Germany there is only a parental leave which can be taken by both partners. [10] Of course, this is a long process, especially because assumptions and perceptions of both employers and employees only change over time.

And this is the last category I want to bring up here. Interactionist theory has long been talking about the meaning we put on things, acts or people changing the way we interact with them. From  the career choice to unequal negotiation of a pay raise, social roles and attitudes are important factors for the latency of the gender wage gap. The guardian writes: “We know that men are more likely to move employers resulting in quicker pay increases and companies paying out bigger bonuses to keep them. And we know that unconscious bias within organisations leads to men being over-promoted and women overlooked.“ [11]

Now, this is of course not a complete dissection of the gender gap but it should give an overview about the complexity of the problem and its solutions. There is not an individual law that can close this gap between men and women and certainly a countries specifics and the culture have to be taken into account when passing laws about it. But they do help in bringing forward and helping the social change that must happen and the discussion about it helps to bring the subject into the conscience of the people.

And maybe the new transparent pay law will actually be passed in Germany and do its part in decreasing wage discrimination. After all, there are examples of laws that go much further than the planned one. In Norway for example, every citizen’s wage and tax returns are published for all to see on the internet.

Norway is ranked 3rd place in the Global Gender Gap Report of 2014 [2], for 2010 I found a gender wage gap of 8.1 per cent. [12] Of course this is not only due to the transparent pay policy. But it is not a bad sign.

 

 

Sources and further reading:

 

[1] Equal pay day:

http://www.independent.co.uk/news/uk/equal-pay-day-women-now-working-for-free-for-the-rest-of-the-year-9837965.html

 

[2] Gender Pay Gap Report:

http://www3.weforum.org/docs/GGGR14/GGGR_CompleteReport_2014.pdf

 

Gender Wage Gap OECD:

http://www.oecd.org/gender/data/genderwagegap.htm

 

Gender pay gap in Germany:

[3] https://www.destatis.de/EN/PressServices/Press/pr/2015/03/PE15_099_621.html

[4] https://www.destatis.de/EN/Publications/STATmagazin/EarningsLabourCosts/2013_03/2013_03GenderPayGap.html

http://www.spiegel.de/international/germany/the-wage-gap-german-women-earn-a-fifth-less-than-men-a-558526.html

 

Discussion about transparent pay in Germany:

[5] http://www.tagesspiegel.de/politik/schwesig-plant-gesetz-zur-entgeltgleichheit-das-gehalt-der-kollegen-bleibt-tabu/11441284.html

[6] http://www.faz.net/aktuell/wirtschaft/wirtschaftspolitik/manuela-schwesig-will-lohngleichheit-fuer-frauen-13457628.html

http://www.zeit.de/2015/10/gehaelter-bezahlung-maenner-frauen

 

criticism against the law:

http://www.spiegel.de/politik/deutschland/kommentar-gehaltsgleichheit-gesetze-aendern-unterschied-nicht-a-1022291.html

[7] http://www.sueddeutsche.de/wirtschaft/gleicher-lohn-fuer-mann-und-frau-nein-es-braucht-kein-gesetz-1.2373936

 

Points speaking for the law:

[8] http://www.sueddeutsche.de/wirtschaft/gleicher-lohn-fuer-mann-und-frau-ja-es-braucht-ein-gesetz-1.2373934

 

Paid parental leave and the gender wage gap:

[9] http://www.pewresearch.org/fact-tank/2013/12/20/the-link-between-parental-leave-and-the-gender-pay-gap/

 

Parental leave in Germany:

[10] http://www.sueddeutsche.de/karriere/auszeit-nach-der-geburt-wann-darf-ich-in-elternzeit-gehen-1.1446688

 

How else could the closing of the gender gap work?:

[11] http://www.theguardian.com/women-in-leadership/2014/jul/25/gender-paygap-widening-good-for-business

http://www.theguardian.com/commentisfree/2014/nov/20/gender-pay-gap-education-business-men

http://www.huffingtonpost.com/2014/02/10/gender-pay-gap-solution_n_4762871.html

http://www.theguardian.com/women-in-leadership/2014/aug/19/gender-pay-gap-five-ways-to-end

 

Gender Wage Gap Norway:

[12] http://www.cesifo-group.de/ifoHome/facts/DICE/Labour-Market-and-Migration/Labour-Market/Anti-discrimination-Gender/Gender-wage-gap-report/fileBinary/Gender-Wage-Gap_dicereport113-db3.pdf

 

 

 

Comments

I think that your article is very well written. Easy to follow, a clear red thread and distinct argumentation! The gender pay gap is, as you state in you introduction, a common and effective way to make visible the inequality between men and women on the macro level of society. I like the suggestion of a legislative solution to the problem and especially through the way of making wages transparent in the same was as Norway have done. And when critics say that this suggestion won’t touch upon the actual reasons of income inequality I think they are both right and wrong at the same time. They are right that such a legislation wouldn’t change the mentality of people and the cultural values that I think is the foundation of unequal wages directly, but I do think that it’s an important step towards changing exactly that. And the critics are wrong since such legislation would help bring up the valuation of female work, not only in concrete pay but also in peoples minds. At least it’s a good starter, according to me!

About the author

Hi, my name is Anne and I study sociology at the university of Potsdam. I love languages, to read and to travel.